Lincoln Outlines its Plan to Take-on the Best of the Best (i.e. Mercedes, Lexus)

[Atomic]

are you satisfied, fellow spinners?

Lincoln to Ax 200 Metro Stores: Survivors Must Upgrade to Match Premium Rivals

By: Jamie LaReau

For: Automotive News -- September 27, 2010 - 12:01 am ET

Ford Americas Boss Mark Fields: Lincoln will Get Seven New or ?Significantly Refreshed? Vehicles in the Next Four Years.

DETROIT -- In an attempt to inject more luxury into its last remaining premium brand, Ford Motor Co. wants to cut at least 200 Lincoln franchises, or 40 percent of its dealers in major metropolitan areas.

Ford will require substantial dealership upgrades intended to raise Lincoln's game in terms of customer experience to the level of such luxury brands as Cadillac, Lexus, Mercedes-Benz and BMW. This push is being driven by luxury consumers who say that Lincoln doesn't match its competitors.

Multiple sources said Ford is expected to outline the plan at a two-day Lincoln dealer meeting that begins Monday, Oct. 4, in Dearborn, Mich.

Small, rural, markets are less of a target, sources said.

The death of Mercury -- which accounted for most of the volume for Lincoln-Mercury dealers -- is prompting Ford to move faster to pair Lincoln with Ford-brand dealers. Still, in some large metro markets, there will still be stand-alone Lincoln stores, Ford executives have said.

After shedding Aston Martin, Land Rover, Jaguar and Volvo over the past three years or so, Ford wants to create a premium showroom experience for its final premium brand.

Lincoln has its work cut out for it. Twelve years ago, it was the top-selling luxury brand in the United States with sales of 187,121 units. Last year, Lincoln sold 82,847 units, ranking seventh among luxury brands and far behind leader Lexus' 215,975 sales.

Ford believes it can increase per-store traffic by having fewer locations in major metropolitan areas. The average number of sales per Lincoln store last year was 67 compared with Lexus' 947. As of Jan. 1, Lexus had 230 U.S. stores, and Lincoln had 1,221, down from 1,596 in 2000. Also as of Jan. 1, Audi had 270 stores; BMW had 338 stores, and Mercedes had 352.

Ford has 495 Lincoln stores in metro areas. It wants to have about 300 metro area dealerships by reducing a mix of stand-alone and dualed stores based on the competitive nature of each market, sources said.

Investment in Lincoln stores is also a priority. That strategy will include higher facilities standards and improved customer service. Those higher standards might prompt some dealers to cash out, sources said.

In some cases Ford will offer buy-out packages to dealers.

'An aggressive plan'

Mercury's imminent death and the consolidation of Lincoln with Ford brand stores are also factors in the consolidation strategy.

With Mercury being wound down by Dec. 31, some 261 U.S. Lincoln dealerships now dualed with Mercury will become stand-alones. Ford insiders say they expect some stand-alone Lincoln dealerships to continue in large metro markets.

A spokesman for Ford said the Lincoln dealer meeting will focus on "the luxury customer experience."

"The future direction of the Lincoln ownership experience has been charted on a joint basis between Ford Motor and select dealer representatives," spokesman Christian Bokich wrote in an e-mail. "It is important that Lincoln dealers are the first to hear about this information from the company."

Ford's leadership team worked with 10 Lincoln dealers on the plan to revamp the brand.

But a dealer familiar with the advisory group said Ford did not reveal a goal to cut 200 franchises.

"That's an aggressive plan," said the Lincoln dealer who asked not to be identified.

Mercury's death will enable Ford to put more marketing and product-development dollars into Lincoln.

"We're going to make a major investment in Lincoln over the next four years with seven new or significantly refreshed products," Mark Fields, Ford's president of the Americas, told analysts in Southfield, Mich., last week.

Ford plans to add a compact, front-drive car or crossover to the Lincoln brand. There is also talk that a car based on the next-generation Ford Mondeo, which is sold in Europe, could be added.

In the future, Lincolns will get features such as active noise cancellation and adaptive suspensions.

But Ford faces a challenge to make Lincoln competitive during a time when mass-market brands are increasing their levels of technology and premium brands are increasing their level of premium amenities.

AutoNation CEO Mike Jackson, who has one stand-alone Lincoln store, said he is focused on the Ford brand and not Lincoln as a stand-alone brand.

'No man's land'

"I think the strategic challenge for all near-luxury brands is that there's two chairs -- premium and mass market -- and you don't want to be caught between the two," Jackson told Automotive News last week. "Between those two chairs you are trying to live in a no man's land, and it's very tough. You sort of have to decide which way you're going to go."

A look at Lincoln's loyalty rates vs. those of its competitors is telling. Edmunds.com reports that 24.6 percent of Lincoln customers are repeat customers. Loyalty rates for other luxury brands are much higher. Lexus' loyalty rate is 46.5 percent, for example; Mercedes' is 47.8 percent. Cadillac's is 29.2 percent, and BMW's is 37.5 percent.

Edmunds.com data show that the projected residual value of a 2010 Lincoln after five years is 33.8 percent compared with five-year residuals of 44.1 percent for Lexus and 37.4 percent for Cadillac.

Sales per store
   
Avg. sales per store in 2009

Lincoln: 67
Cadillac: 80
Audi:   306
Mercedes-Benz: 546
BMW:   581
Lexus: 947

Source: Automotive News Data Center

[Submariner]

Lincoln needs to substantially revamp it's lineup before it can compete with the Likes of Mercedes, Lexus, BMW, Audi, etc.

[Atomic]

it is my understanding that the 2011 lincoln mkz hybrid and '11 lincoln mkx are included in those "new" or "significantly refreshed" models. here is what i propose:

- a rwd with awd option, v8 lincoln town car replacement (no fwd, imo for this segment)
- an "all new" rwd ford f-series derived suv with awd option and diesel availability navigator with lwb version to take on lincoln's new design theme - to fight caddy's escalade and "L" variant, jeep grand cherokee overland and range rover 
- a totally reworked mkz and mkz hybrid "replacement" (both with awd option) with more powerful v6 set drastically apart from the lesser ford fusion - an infiniti "m" and "g" and lexus (camry-based) es fighter
- dropping the smaller engine on the mks while adding more unique features and styling (already sweet) to further set it apart from the ford taurus - a mercedes e-class and bmw 5-series fighter, yet less costly
- a totally hot "hot rod lincoln" coupe and convertible version on the mks platform to serve as the brand's hallo car
- replacement for the controversial mkt, perhaps ford explorer (opposed to flex) based vehicle with completely unique, yet less polarizing looks of the dreadfully slow selling mkt crossover to drive an enormous sales increase - a lexus rx fighter
- two new rwd with awd availability small series of cars to complete with acura, audi, bmw, mercedes, infiniti, lexus - thinking cars to fight better with the likes of the audi a3&a4&a5, bimmer 1&3 series, mercedes c-class (& smaller offerings), lexus is, etc. - with a complete range of coupes, sedans, wagons, crossovers, convertibles/roadster, 2-seaters - in appropriate numbers per configuration 

[the Teuton]

I think a big, sleek Lincoln coupe with 400 hp and RWD would do wonders for the brand. Advertise it using "Hot Rod Lincoln" as the theme music, and we're in business.

[Atomic]

"HRL" would likely be the same. oh wait! it must have "mk" in it, like mkh  ! lol. 

[Mustangfan2003]

Lincoln is a mess right now.  They are behind Cadillac and really behind the Germans. 

[Atomic]

Lincoln is a mess right now.  They are behind Cadillac and really behind the Germans.  

sad, but true, although sales have increased significantly in september 2010.

[sportyaccordy]

Ford either has to invest heavily & revamp the brand or just kill off Lincoln entirely. Maybe even take the brand off the market for a year, clear out inventory and use that break to develop an Infiniti FM type platform. That combined w/a return to word based names (to help differentiate from the 535is, A6s, E550s, G35xSs etc) will, in combo with Ford not having taken (much) federal money will help a lot.

[Galaxy]

Imo it would have been best to keep Volvo and ditch Lincoln.

[3.0L V6]

Imo it would have been best to keep Volvo and ditch Lincoln.

Nobody would have bought Lincoln and it would've involved culling a load of dealers, making it an expensive option.

Lincoln needs some names. Continential, Mark, or whatever, but not this MK stuff.

[Mustangfan2003]

I love the old names Lincoln had.  Ford has the new 5.0 V8 and a line up of turbo 4 and 6 cylinders so now all they need is a good rwd platform to use and things would be great. 

[the Teuton]

What Lincoln needs is a coupe that looks like a Lincolnized Maybach Excelero. It'd be awesome.

[Mustangfan2003]

Build this on an extended Mustang platform and make the grill a little smaller

[the Teuton]

What is that?

[Mustangfan2003]

The MKR concept from 3 or 4 years ago.

[the Teuton]

The MKR concept from 3 or 4 years ago.

Wow.

[Mustangfan2003]

Wow.

I think Ford would've built this too if it wasn't for fuel prices and the economy going straight to hell. 

[68_427]

Wow.

+1

[Mustangfan2003]

That really is how a modern American luxury car should look. 

[2o6]

I think it looks really bland, and if brought to production would look very underwhelming.


It has stumpy proportions and a very boring and slab sided profile.


Now, THIS was a hot car.

[the Teuton]

It even uses the T-Bird's windshield. It looks like a T-Bird. It probably should have been made.

It especially looks like this T-Bird.

[goldenlover1101]

Definitely not enough. Lincoln is in an awful state currently. They need a Cadillac type renaissance to rejuvenate interest in the brand. Get rid of the Alphanumeric names and bring back the classic monikers. Also, a better styling theme. I agree they need to axe some of the dealers and better the dealer experience. However, I hope they are investing the same focus in the model redesigns.

[Atomic]

That really is how a modern American luxury car should look. 

exactly!

[Gotta-Qik-C7]

+1

Nice!

[Morris Minor]

Some of the numbers in the OP are very telling, especially the sales per store. My recommendation would be to have all-Lincoln dealers only, no pairings with the Ford brand. In this city at least, you do not see Acura-Honda, Infiniti-Nissan or Lexus-Toyota. e.g. To walk into a Toyota dealership is to experience a madhouse industrial pressure selling environment with noisy PA announcements, screaming kids and hungry salesmen hunting in packs. A Lexus dealer is a haven of quiet tranquility. For some, paying extra for the badge-engineered Toyota is worth it for the more pleasant sales and post-sales experience.

[Vinsanity]

Forgive my pessimism when the only specific mention in the press release of new product is a FWD Mondeo re-badge. I'm sure the BMW 3-series (and Cadillac CTS, for that matter) are shaking in their boots. If this is what Ford has planned for their flagship brand, they're better off putting it out to pasture and starting over with a new brand name. Like Edsel. Or Hammerhead-i.

[sportyaccordy]

Some of the numbers in the OP are very telling, especially the sales per store. My recommendation would be to have all-Lincoln dealers only, no pairings with the Ford brand. In this city at least, you do not see Acura-Honda, Infiniti-Nissan or Lexus-Toyota. e.g. To walk into a Toyota dealership is to experience a madhouse industrial pressure selling environment with noisy PA announcements, screaming kids and hungry salesmen hunting in packs. A Lexus dealer is a haven of quiet tranquility. For some, paying extra for the badge-engineered Toyota is worth it for the more pleasant sales and post-sales experience.

Yea seeing a Fusion side by side with an MKX or whatever the fuck it is can't help the Lincoln sell.

[Galaxy]

Nobody would have bought Lincoln and it would've involved culling a load of dealers, making it an expensive option.

Lincoln needs some names. Continential, Mark, or whatever, but not this MK stuff.

Well they want to cur 40% anyway. Imo in the long term to be viable "Ford Premium" needs to go global. And Volvo would have been much easier. Especially with Jaguar gone.

[Gotta-Qik-C7]

Yea seeing a Fusion side by side with an MKX or whatever the fuck it is can't help the Lincoln sell.

Damn rite!

[Atomic]

Some of the numbers in the OP are very telling, especially the sales per store. My recommendation would be to have all-Lincoln dealers only, no pairings with the Ford brand. In this city at least, you do not see Acura-Honda, Infiniti-Nissan or Lexus-Toyota. e.g. To walk into a Toyota dealership is to experience a madhouse industrial pressure selling environment with noisy PA announcements, screaming kids and hungry salesmen hunting in packs. A Lexus dealer is a haven of quiet tranquility. For some, paying extra for the badge-engineered Toyota is worth it for the more pleasant sales and post-sales experience.

this would be ideal in focusing on awesome customer service, but they would need to sell more lincolns to sustain stand-alone dealerships, as 'benz, bimmer, etc. generate far higher profit margains and typically without steep rebates - what we often see on american brands. that is how "real" luxury brands do it. i hope fmc does not start adding lincoln models that were destined to be mercuries. i can see them turning lincoln into "lincoln-mercury" without the "m" brand, just to add volume.